Indiana University

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Friday, January 12, 2007

Last modified: Friday, January 12, 2007

IU Endowment returns beat national average

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Jan. 12, 2007

BLOOMINGTON, Ind. -- Indiana University's endowment performed significantly better than the national average for colleges and universities in the fiscal year ending in 2006. IU's endowment of $1.3 billion, managed by the IU Foundation, earned 13.0 percent, net of managers' fees.

The Commonfund Benchmarks Study, released Wednesday, found average total returns of 10.6 percent in 2006 in a survey of 741 endowments at public and private colleges, universities and other educational institutions, and at state institution-related foundations. Commonfund manages the endowments of numerous colleges and nonprofit organizations.

A different study, conducted by the National Association of College and University Business Officers (NACUBO) and TIAA-CREF, an investment-management company, reported that the national average for colleges and universities was 10.7 percent.

Over the same period, the S&P 500 returned 8.6 percent, and the IU Foundation's total target weighted index returned 11.7 percent. The IU Foundation's index includes appropriately weighted benchmarks in relation to the asset allocation targets of the endowment portfolio, such as the S&P 500, the Russell Mid Cap Index, and the MSCI EAFE (Morgan Stanley Capital International -- Europe, Australia, & Far East Index), among others.

"The foundation's goal," said Foundation President Curt Simic, "is to maintain the purchasing power of the endowment over time. The investment committee of the foundation's board of directors works tirelessly to develop and adjust a long-term strategy that will ensure a steady and growing income stream for IU."

Gary Stratten, chief investment officer for the IU Foundation, said, "Much of the current success is a function of identifying and investing with great investment managers over the years. Recent changes in asset allocation also have added substantially to performance."

"The bottom line," said Simic, "is that the university benefits from a relatively stable and growing income stream, and donors know that their gifts will continue to benefit IU for years to come."

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